ANALYSIS
"Doing business in California sucks": Texas continues to capitalize on the business nightmare in the Golden State
Digital Brands Group—a clothing and e-commerce company—moved its headquarters to Round Rock, Texas, north of Austin, where it leased approximately 70,000 square feet of warehouse and office space to expand its college sports apparel business.
California flag
Another Californian company has joined the list of firms leaving the state due to its challenging business environment. Digital Brands Group moved its headquarters to Round Rock, Texas, in response to rising operating costs.
The news comes at a time when California is facing a significant exodus of taxpayers and businesses.
Digital Brands Group CEO Hil Davis harshly criticized California's business environment and stated that the cost of operating in the state led his company to relocate its headquarters to Texas.
"Doing business in the state of California sucks," Davis told Fox News Digital.
The apparel and e-commerce company moved its headquarters to Round Rock, north of Austin, where it leased about 70,000 square feet of warehouse and office space to expand its college sports apparel business.
Economy
Texas solidifies its economic boom with the arrival of new residents and billions in tax revenue
Williams Perdomo
Davis noted that the new facilities cost about the same as the space the company had in Vernon, Calif., near Los Angeles. However, he explained that rent was not the only factor influencing the decision.
The entrepreneur cited the high cost of living, long commutes for employees and rising costs of doing business, including expenses associated with defending against lawsuits.
"You start to add all those things up. It doesn’t work. It doesn’t make sense. It’s too hard," he said.
The move comes as California debates a proposed flat tax of up to 5% on individuals with a net worth exceeding $1 billion and, at the same time, faces an exodus of taxpayers and revenue.
According to the most recent IRS data cited by Fox News, Los Angeles County lost 17,496 taxpayers, who shifted nearly $1.9 billion in revenue to other states. Orange County recorded a net loss of 11,618 taxpayers; San Diego, 9,401; Riverside, 8,968; and San Bernardino, 8,462.
Digital Brands Group will maintain part of its production operations in Los Angeles, but Davis noted that Round Rock offers lower operating costs, a central location for shipments to universities across the country and access to Austin's creative workforce.
Texas solidifies its economic boom
An analysis of IRS migration data conducted by the Tax Foundation shows that Texas received more than $5 billion in adjusted gross income from taxpayers who moved from other states, while California and New York recorded multibillion-dollar drops in tax revenue.
Furthermore, this growth is not concentrated in a single city. Dallas-Fort Worth was the metropolitan area that gained the most residents in the past year, while Houston, Austin and San Antonio were also among the fastest-growing metropolitan regions in the country.
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